So Francesco decided to close Mutti s side businesses in cheese and cattle and focus solely on tomatoes. But rather than compete on price he wanted to compete on quality. Barilla was the first to see the need to invest in brand building to protect its shelf price and maintain share Francesco observes in the case. However no one believed that you could create a brand in tomatoes—a commodity.
The other processors all thought the answer was to lower their prices by paying less for their tomatoes. We took a different approach and concentrated on quality. This meant going to the start of the supply chain Chinese Overseas America Number Data the tomato farmers. You can t put the brand on it get the premium and then work backward to bring in higher quality raw materials says Shelman. Most processors try to pay farmers as little as possible for their tomatoes. They enter contracts with farmers early in the year but in years with large harvests they might find reasons to discount that price for poor quality. By contrast Mutti decided to pay farmers both a fixed price no matter how many tomatoes were produced and a premium for better quality. Farmers were asked to harvest five days later than normal which produces a riper tastier product without adding sweeteners but increases the level of risk for grower and processor.
Francesco also manages quality through direct interaction with the growers. award at a ceremony attended by all Mutti farmers. It s an opportunity not only to recognize them for a job well done and to share ideas but also to educate on subjects like precision agriculture and other green techniques—though Francesco admits in the case that this is an uphill battle. The way Francesco handles quality control inside the plant is especially unique. While most companies package and label their products separately the bulk of the tomatoes Mutti processes— percent—go directly into its final packaging.